Subject Name: Business Strategy

Topic Name(s): Case Study

Lecture No: 14

Suman Choudhary,
ISBM

08/23/2020 Lecture Number, Unit Number 1

 Case Study

BASICS

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 InterContinental Hotels

Technology as a Competitive Method: The Case of

InterContinental Hotels
F.Anil Bilgihan

1) Technology, broadly, is a tool or set of tools aimed at making some aspect of life better,
easier, or more efficient. Science and technology have great potential to improve lives in all
communities around the world. Technology is evolving at such a rapid pace it's hard to tell
what will happen in six months. It's hard to predict what products will make it to the market
and which will take the crown and end up as everybody's favorite toy, business companion
or home entertainment device. Every technology has changed our lives, some of them in
manner more aggressive than other. It’s hard to point out to a specific technology and
makes it responsible for the major changes in a life of person, because every one of us may
be influenced by other things. Businesses are using technology to gain industry advantage in
many ways. “The successful companies of the next decade will be the ones that use digital
tools to reinvent the way they work. These companies will make decisions quickly, act
efficiently, and directly touch their customers in positive ways.” Bill Gates.

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2) InterContinental Hotels used the technology as one of their competitive methods to gain
industry advantage. For instance AT&T announced that it has deployed an Internet Protocol
Virtual Private Network (IP VPN) for InterContinental Hotels Group and its managed
Candlewood Suites Hotel portfolio, the first of its kind in the hospitality industry. The AT&T
solution leverages the VPN and Multi-Protocol Label Switching (MPLS) technology to provide
a multi-faceted and highly reliable – but low cost – network. MPLS prioritizes data traffic
between the hotel and the property management application residing at AT&T’s IDC,
ensuring application performance and uninterrupted communications. It is a very unique
technology for hospitality industry. Their success is behind their corporate decisions of how
to invest in technology. Their company strategy was based on the leadership of its CEO,
Brian Langton, who believed in the need to integrate key marketing, reservations and
operating systems into one strong technology based system that would lead the industry as
Holiday Inn had during the 1960s. He prophesied the future of technology, which was e-
commerce, and integrated necessary technologic developments to his company. The
company applied the strategic plan. And with the help of that competitive method,
company gained considerable advantage over others in the industry.

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• 3) Distinguishing among competitors and gaining more market share by using
technology as competitive methods have challenges. It is very important to scan
the environment in this situation also. The key to gain more market share by using
technology is to have the right choice at the right time. Everyday technology is
developing so fast and these developments can be adapted to hospitality industry
as well. For example when VOIP is developed, it is very important to use this
technology in your hotel first. You need to look the environment and then adopt
the technology where it fits in your industry. However, those upgrades seem to be
endless as the development of technology is not likely to stop. On the other hand,
hospitality organizations allocate a budget for technology every year. That budget
is often narrow; most of the hospitality organizations do not have enough
economical power to buy all of the available technologies. The point here is to
decide which technology to integrate with, by scanning the environment and
foreseeing which technology will be demanded most by the customers. Strategic
alignment is the key. It should support the companies’ mission.

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4) As we discussed in the third question, strategic alignment plays the key role.
Companies should select the right technology at the right time and this technology
should be parallel to company strategy. For example, McDonalds used free Wi-Fi at
their restaurants but it failed, because it didn’t fit into company strategy which was
‘fast’. Table turnovers increased. Later they put time limit for Wi-Fi, and then it
became successful. Amount of the budget allocated to be spent in technological
development is another important issue. 
 
5) The investments that IHG has done in technology were very successful. The first
reason was, they realized the need in e-commerce and invested enough money for
the upgrade. The second reason was that they realized this need at the right time and
put it into process right away. And the third reason was their understanding that the
developments they have done were not a technology game but an issue of customer
service fulfillment. In 2000, selection of Web-enabled PMS was a unique strategy.

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6) Although main goal of IHG was customer satisfaction, those two hotels stand as prototypes.
They were used as our “experimental guestroom” in University of Delaware to show what can
be done with the latest technology. So, it can be said that there are differences between the
corporation and those two hotels. That does not mean other brands of the corporation lacks
technology, but it would be useful to keep in mind that those two hotels are not one of those
Hampton Inns or Embassy Suites which are also brands of the corporation.
 
 
7) Any information related to other companies technological status would be helpful in
determining the overall demand for the technology investments IHG has made over the years.
This keeps IHG in competition with other companies. Moreover, customer feedbacks and data
mining methods can be used as well.
 
8) Academic researches, the media (technology magazines, internet), technology conferences
like HITEC, and the researches that big companies made and, surveys can be useful in tracking
developments in technology for the travel industry.

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